ST. GEORGE – Washington County’s residential real estate market has changed dramatically in recent years, creating opportunities for prospective homebuyers and additional obstacles for many sellers.

Buyers now have the opportunity to choose from a vast selection of affordable homes in Washington County, including many bank-owned properties, forcing some residents hoping to sell their homes to reduce both their expectations and their prices.

Although some sellers have been troubled by significant declines in home values since the onset of recession, Carl and Lacy Franke said they understand the nature of Washington County’s housing market and have adjusted their outlook accordingly as they attempt to sell their St. George home.

Carl, a high school teacher, said his family’s five-bedroom, 4,040 square-foot home was appraised at about $575,000 in 2007, but he recognizes that the inflated pre-recession value has little significance in 2011.

“Everything was so inflated at the time,” he said, adding that the home’s basement was unfinished in 2007 despite the sizable estimated value. “We would have loved to have sold it for $500,000, but you have to be realistic.”

The home is now listed for sale at $389,900, Carl said, representing a steep decline from its prior value.

Home values in Washington County have declined by an estimated 35 percent since the onset of the recession, said Rand McCullough, president of the Washington County Board of Realtors.

The average price of a home sold in the county from January to July was $185,389, representing a 7.6 percent decline from figures recorded during the same month in 2010, he said.

McCullough, who also serves as a real estate agent for Carl and Lacy Franke, said the noticeable decline in the county’s average sale price comes as a result of continued price depreciation among high-priced homes in the area.

While the value of Carl and Lacy’s home has fallen significantly, Carl said his family would not sustain financial losses if the property were to sell at its current asking price.

The custom home was built in 2002, and Carl said he saved money by making significant contributions to the building process with assistance from family and friends.

“We put in our own sweat equity,” he said.

Lacy said the home was initially listed for sale in April for about $399,000, but the price was adjusted in an effort to compete with the many distressed properties on the market.

“There are so many homes for people to choose from,” she said.

Vardell Curtis, CEO of the Washington County board of Realtors, said short sales and bank-owned properties account for about 80 percent of residential real estate transactions in Washington County.

“If you’re a seller of a non-distressed property that means you’re going to be competing with other homes that have an advantage over you,” he said, adding that bank-owned properties are often sold at deep discounts.

Although the family’s home has been on the market since April without attracting a buyer, McCullough said an average home in Washington is expected to remain on the market for slightly more than 10 months. In late 2009, local homes spent an average of about 20 months on the market, he said.

With homes depreciating significantly since the peak of the housing boom, McCullough said total residential sales throughout the county increased by about 7 percent from last year, with 1,825 listed units sold from January to July.

Attracted by affordable prices, a number of prospective buyers are taking advantage of the opportunity to choose from the wide selection of properties available in the area, McCullough said.

Heather and Joseph Hill, a recently married St. George couple planning to purchase their first home, said they are looking for houses priced in the $140,000 to $150,000 range.

Prior to the county’s housing market collapse, the couple would not have been able to find a suitable home in their price range, Joseph said.

“It just seems like now you can get more for your dollar,” he said.

McCullough said homes priced at $250,000 or less have experienced a slight increase in value during the past year while home prices at the higher end of the market continue to fall.

“These lower-end properties are inching their way up,” he said,

Hoping to find an affordable three-bedroom home, Heather said she and her husband have more options in today’s market.

“We’re finding five-bedroom (homes) in our price range,” she said. “Now there are actual options out there that are decent.”

McCullough said approximately 2,300 homes are listed for sale in Washington County, representing an 8 percent decline from last year.

“This is an excellent sign,” he said. “It does mean our market is heating up a little bit.”

While the inventory is declining, McCullough said the 2,300 homes on the market represent a continued “glut of inventory,” leaving prospective buyers with a wealth of options in terms of housing selection.

In addition to lower prices and a vast selection of properties, buyers are now receiving more favorable interest rates on their mortgage loans, he said.

He said many buyers are obtaining interest rates of about 4.25 percent.

“During the boom time, 6-and-a-half to 7 percent was a good rate,” he said.

As prospective buyers benefit from the troubled real estate market and many sellers continue to face the harsh reality of competing with a wealth of discounted bank-owned properties, a number of local homeowners with no plans to sell their properties remain relatively unaffected by the ups and downs of the housing market.

Austin Somerville, an 80-year-old retiree, and his wife Connie have lived in their St. George home for four years, and while the market has shifted dramatically since 2007, Somerville said he has not experienced the full force of the housing market’s collapse.

After purchasing his current home within the SunRiver St. George retirement community for about $300,000, Somerville said the home’s value has dropped by about 30 percent in recent years, but he has no plans to sell his property in the near or distant future.

“It won’t affect me until I try to sell, and I don’t plan to sell,” he said. “I plan to stay here until they cremate me.”

Unless homeowners are interested in refinancing, Curtis said recent fluctuations in price are not likely to affect residents who plan to keep their homes.

“All these losses and gains are all on paper, and they don’t actually measure out to anything until you buy or sell,” he said, although some have felt the emotional weight associated with depreciating home value.

Somerville said he believes homes within the retirement community have experienced less severe depreciation than those located in other areas of the county.

“It’s one of the nicest communities we’ve ever lived in,” he said, underscoring his reasons for retaining the home. “It’s just a great place to be.”

A number of residents with no plans to buy or sell are feeling the emotional impact of watching their home values diminish, McCullough said.

“Everybody who owns a home will always wonder what their home is worth,” he said.

While most homeowners who plan to retain their properties have not experienced the difficulties sellers face while trying to sell their homes in a market rife with competition, McCullough said many remain troubled by recent price fluctuations.

“It still bothers the heck out of them,” he said. “It affects everybody emotionally.”